Simms v. United States

MISTY SIMMS, next friend of Caelan Jantuah, an infant, and MISTY SIMMS, individually Plaintiffs,v.THE UNITED STATES OF AMERICA, Defendant.

MEMORANDUM OPINION AND ORDER

ROBERT
C. CHAMBERS, CHIEF JUDGE.

On
order of remand by the Fourth Circuit, the parties appeared
before the Court for a collateral source hearing pursuant to
West Virginia's Medical Professional Liability Act.
See W.Va. Code § 55-7B-9a. Plaintiff Misty
Simms brought this case under the Federal Tort Claims Act in
her individual capacity and on behalf of her minor son,
Caelan Jantuah. After holding a bench trial on
Plaintiff's wrongful birth claim, the Court awarded
damages to Plaintiff in her individual capacity and dismissed
Caelan Jantuah as a party because West Virginia does not
recognize a cause of action for the child. See Simms v.
United States (Simms I), 107 F.Supp.3d 561
(S.D. W.Va. 2015). Defendant appealed this Court's
decision regarding the damages award, claiming that Defendant
should have received an immediate offset, or, in the
alternative, the Court should have directed the award into a
reversionary trust. The Fourth Circuit heard argument on
January 27, 2016 and issued an opinion on October 7, 2016
affirming in part and vacating in part. See Simms v.
United States (Simms II), 839 F.3d 364 (4th
Cir. 2016). The Fourth Circuit remanded the case back to this
Court to conduct a collateral source hearing pursuant to West
Virginia Code § 55-7B-9a. The Court has conducted the
required hearing and subsequently finds that Defendant does
not meet the standard to justify an immediate offset for past
or future medical expenses. The Court further rejects the
request to order a reversionary trust.

I.
Background

The
Court has detailed the factual circumstances of this case
extensively and will not undertake a full review here.
See Simms I, 107 F.Supp.3d at 564-68 (detailing
relevant background information). Plaintiff brought suit
against the United States under the Federal Tort Claims Act
(FTCA) for negligent acts taken by Valley Health Systems,
Inc. (Valley Health) during Plaintiff's neonatal care.
Although Valley Health detected potential fetal abnormalities
early in Plaintiff's pregnancy, the health care provider
failed to inform Plaintiff of these abnormalities until
Plaintiff's third trimester. As West Virginia's, and
surrounding states', laws prohibit the termination of a
pregnancy during the third trimester, this delay prevented
Plaintiff from making a timely and informed decision on
whether to obtain an abortion. Plaintiff's son, Caelan
Jantuah (Caelan), survived birth, but he suffers from severe
brain malformation and lives in a vegetative state.

Plaintiff
sued Defendant for wrongful birth, which West Virginia
recognizes to allow recovery for “extraordinary costs
[incurred] for rearing a child with birth defects.”
James G. v. Caserta, 332, S.E.2d 872, 882 ( W.Va.
1985). After a bench trial, this Court awarded Plaintiff
damages for past medical expenses, future medical expenses,
lost income, and noneconomic damages, in an amount of $12,
222, 743.00.[1]See Order, ECF No. 218, at 2.
Defendant timely appealed, challenging the Court's
decision that an offset was not warranted for the
Defendant's federal contributions to West Virginia's
Medicaid program. Defendant also challenged the Court's
decision to not require a reversionary trust to allocate
Plaintiff's award.

After
hearing oral arguments, the Fourth Circuit issued a published
decision that affirmed in part, vacated in part, and
remanded. See Simms II, 839 F.3d at 364. The court
affirmed this Court's decision to award damages for past
and future medical expenses even when West Virginia's
Medicaid program issued the payments. Id. at 368-69.
The court also affirmed this Court's use of medical
billing statements to determine the appropriate damages award
rather than using the amounts Medicaid actually paid for the
medical services. Id. at 369-70. In remanding the
case back to this Court, the Fourth Circuit determined that
the Medical Professional Liability Act (MPLA or §
55-7B-9a) requires a district court to conduct a collateral
source hearing. The remand specifically tasked this Court to
determine whether West Virginia's Medicaid program had a
subrogation lien against Plaintiff as a
“recipient” or through another right of recovery
to prevent an immediate offset to the final judgment award
for past and future medical expenses. Id. at 371-72.
The court also noted that issues of double recovery and a
reversionary trust could be reconsidered. Id. at 373
n.5.

Accordingly,
the Court issued a briefing schedule for the parties to
explain why collateral source payments from West
Virginia's Medicaid program should, or should not, be
factored into the final damages award as an offset. As
directed by the Fourth Circuit, the Court held a collateral
source hearing on July 11, 2017 pursuant to § 55-7B-9a.

II.
The MPLA

West
Virginia recognizes the common law collateral source rule in
which a tortfeasor cannot receive an offset or credit against
the injured party for payments received by other sources.
See Kenney v. Liston, 760 S.E.2d 434, 440 ( W.Va.
2014). However, the MPLA modifies the collateral source rule
for cases involving medical professional liability,
permitting an offset in damages. See Manor Care, Inc. v.
Douglas, 763 S.E.2d 73, 87 ( W.Va. 2014). The MPLA
defines collateral sources as “[a]ny federal or state
act, public program or insurance which provides payments for
medical expenses.” W.Va. Code § 55-7B-2b. The
parties do not dispute that Medicaid, as a state public
medical assistance program, qualifies as a collateral source.

The
MPLA separates past medical payments from future medical
payments when determining whether a defendant obtains an
offset for collateral source payments. For past payments, the
“defendant who has been found liable to the plaintiff
for damages for medical care … may present to the
court, after the trier of fact has rendered a verdict, but
before the entry of judgment, evidence of payments the
plaintiff has received for the same injury from collateral
sources.” W.Va. Code § 55-7B-9a(a). Before
presenting evidence on calculated future medical payments,
however, the defendant must convince the court of three
preconditions: (1) that the collateral source has “a
preexisting contractual or statutory obligation” to pay
the benefits; (2) that “[t]he benefits, to a reasonable
degree of certainty, will be paid to the plaintiff for”
future expenses as determined by the court; and (3) that the
future medical payments are “readily reducible to a sum
certain.” W.Va. Code § 55-7B-9a(b).

After
the parties present the evidence for past and future medical
payments in a collateral source hearing, the court must
determine the following factual findings: (1) the total
damage award; (2) the total damage award in relation to
“each category of economic loss”; (3) the total
amount of collateral source payments, both past and future,
that should be considered; and (4) the total amount of a
plaintiff's contributions and premiums paid to receive
the benefits. W.Va. Code § 55-7B-9a(d). From this
information, the court calculates the final damage award to
be issued in a judgment order.

The
final section of the MPLA contains a list of exceptions that
prevent a court from issuing an offset award for collateral
source payments. W.Va. Code § 55-7B-9a(g). A court
cannot reduce the amount awarded in a verdict to reflect: (1)
“[a]mounts paid to or on behalf of the plaintiff which
the collateral source has a right to recover from the
plaintiff through subrogation, lien or reimbursement”;
(2) “[a]mounts in excess of benefits actually paid or
to be paid” to the plaintiff by the collateral source;
(3) proceeds from individual disability payments or income
replacement insurance when paid entirely by the plaintiff;
(4) a plaintiff's assets; or (5) settlement awards from
other tortfeasors. Id. With these directives in
mind, the Court turns to Plaintiff's damages award.

III.
Discussion

The
West Virginia legislature designed the MPLA to alter the
traditional collateral source rule in medical liability
cases. See Kenney, 760 S.E.2d at 446 n.54 (“We
note that, in the limited context of medical negligence
actions, the Legislature has chosen to alter this balance and
to permit a careless defendant to benefit from evidence of
payments the plaintiff has received for the same injury from
collateral sources.” (citation omitted)). Pursuant to
§ 55-7B-9a and the Fourth Circuit's mandate, the
Court held a collateral source hearing so the parties could
present evidence of past and future payments made primarily
by West Virginia's Medicaid program. Based on the
information presented at the hearing and this Court's
interpretation of “recipient” and “third
party” under West Virginia Code § 9-5-11, the
Court finds that the state Medicaid program has a subrogation
lien over Plaintiff's damage award, and, thus, Defendant
cannot obtain an immediate offset for past or future medical
expenses.

a.
Past Medical Expenses

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the
collateral source hearing, Defendant presented evidence of
payments made by the state Medicaid program that Defendant
thought justified an offset from the final award. The Court
first turns to the MPLA exception to determine whether such
an offset is permitted. W.Va. Code &sect; 55-7B-9a(g).
Specifically, the first listed exception prevents a court
from calculating an offset when the collateral source, in
this case Medicaid, has a right to recover from Plaintiff
directly. See W.Va. Code &sect; 55-7B-9a(g)(1). As
directed by the Fourth Circuit, the Court must explain why it
previously concluded that the state Medicaid program held a
subrogation lien over Plaintiff. See Mem. Op. &
Order, ECF No. 183, at 4 (“Finally, the state
Medicaid program has the lien against any award to ...

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